Structure From Individual to Market DemandFunctions Elasticities Revenue and own-price elasticity ofdemand Marginal revenue and price elasticity

Structure Economic profit Short-run profit maximization –Comparative statics Long-run profit maximization Profit maximization and returns to scale Revealed profit maximization

Properties of Demand Functions Comparative statics analysis （比较 静态分析）of ordinary demand functions -- the study of how ordinary demands x1

Structure Rational constrained choice Computing ordinary demands – Interior solution （内在解） –Corner solution （角点解） – “Kinky” solution Example: Choosing taxes

Structure Endowments Budget constraints with endowments Net demands Labor supply

Contents Instructor and TAs Requirements Course outline An example: market for apartments

Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?

Structure Definition Consumption externality Production externality The tragedy of commons

Contents The Edgeworth (艾奇沃斯) Box Pareto improving trade Pareto Efficient Allocation The Core (核心) Trade in a competitive market Walras’ Law of general equilibrium (一般均衡)

Structure Non-collusive moves – Simultaneous moves Quantity competition –Cournot model Price competition – Bertrand model – Sequential moves Quantity leadership – Stakelberg model Price leadership Collusion